Nigeria to sell four state-owned refineries in 2014

An audit recommended their sale due to inadequate government funding and “sub-optimal performance.” The refineries, which have a capacity of 445,000 bpd, should be privatized within 18 months.

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By ELISHA BALA-GBOGBO
Bloomberg
Nigeria, Africas largest oil producer, plans to begin
privatizing its four state-owned oil refineries before the end
of the first quarter, Petroleum Minister Diezani Alison-Madueke
said.

We would like to see major infrastructural entities, such
as refineries, moving out of government hands into the private
sector, Ms. Alison-Madueke said in an interview with
Bloomberg TV Africa in London. Government does not want
to be in the business of running major infrastructure entities
and we havent done a very good job at it over all these
years.

A presidential audit of the facilities last year recommended
their sale due to inadequate government funding and
sub-optimal performance. The refineries, which have
a combined capacity of 445,000 bpd, should be privatized within
18 months, according to the report submitted to President
Goodluck Jonathan in November 2012. Nigeria, a member of the
Organization of Petroleum Exporting Countries, produced 1.99
million bpd of crude in October, data compiled by Bloomberg
show.

While Nigeria is also Africas top crude exporter and the
most populous with more than 160 million people, it relies on
fuel imports to meet more than 70% of its needs. Its
state-owned plants operate at a fraction of their capacity
because of poor maintenance and aging equipment. The
West African nation exchanges 60,000 bpd of crude for products
with Trafigura Beheer BV and a similar amount with Societe
Ivoirienne de Raffinages refinery in Ivory Coast, according
to Nigeria National Petroleum Corp.

We are right now undergoing a major turnaround maintenance program of the
refineries, Ms. Alison-Madueke said.

Improvements to the two-unit, 210,000-bpd Port Harcourt refinery, the countrys
biggest, will be completed by the end of the year, to be
followed by enhancements at the Warri and Kaduna sites in 2014,
according to the NNPC. Warri has a processing capacity of
125,000 bpd and Kaduna, 110,000 bpd.

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